On Tuesday of this week I made a handful of points about crude oil’s chart. In a nutshell, I thought oil had peaked at $135 in the prior week, and Tuesday’s level of $133 was just the beginning of a minor correction. Now with oil trading in the mid-$127 area (you can thank me for the tip later), I want to update my thoughts on crude’s chart and let you know to not get too excited about the commodity’s demise…..the bigger uptrend hasn’t fallen apart yet.

There are two near-term support lines we’re dealing with now. The upper one was brushed with today’s low of 124.67, and may have sparked a bounce. The second one is currently around 118…and hasn’t even been tested yet.

The point is, this week’s weakness is fun to think about while you’re shelling out $4 a gallon at the gas pump. The reality is, oil’s still damn expensive, and technically getting more expensive.

YES, in the bigger picture, I’m still an oil bear now. I mentioned earlier in the week I don’t think oil’s going to $200 the way some people think it will. That said, I’m going to let the chart tell me when it’s time for me to actually do something about being an oil bear (i.e. trade it). As ripe as we are for a tumble - or overbought - there’s still a lot of support.

A move under that lower support level would be a good start in my book. That would also mean a move under the 20 day moving average line, or the red line on my chart.

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I don’t know if any of you noticed this, but I was surprised to see the strongest sector over the last three months has been…..transportation stocks? It’s true – transportation stocks have outpaced technology (which has been coming on strong) and even energy or basic materials.

Might we infer something here? I think so. More specifically, I think this is a hint we should all be taking and doing something with.

The brunt of the rally is attributable to railroads. Despite the fact that these stocks are overbought (and therefore dangerous), the value is there. Once the technicals cool off, the values will be even better. Check out CSX (CSX), Burlington (BNI), and Union Pacific (UNP) if you want the best of the best. Like I said, all are overbought right now, but I could really get fired up again if they pullback and start to receiver.

Truckers have participated in the rally too, though I still don’t particularly like them. Actually, I’m kind of torn here. If oil comes down in price (like I think it will), then trucking will actually become more attractive because fuel costs will be cheaper – which will improve demand.

My problem is two-fold…(1) I’m not absolutely certain gas and diesel prices will come down, and (2) I’m not sure these companies will be any more profitable if they do come down. I was surprised to see how expensive some of these stocks were (based on P/Es).

Take Marten Transport (MRTN) for instance. Its P/E is 28.9. Industry giant YRC Worldwide (YRCW) somehow managed to give up sales this year. Knight Transportation (KNX) shrank the bottom line by 31% this year. What gives?

Industry-wide, there’s no margin. Like I said, part of that may be higher diesel fuel prices…..but I think that’s a lame excuse – these guys have been passing those expenses on to me and you. If gas prices retreat, then these stocks may find appropriate valuations at their current levels. So, no advantage there.

The sleeper in the transportation group is marine shipping. I love these oddball, offbeat industries that nobody really sees, as they can be a quiet little money machine very few people tap into.

Undoubtedly you’ve heard at least part of the DryShips (DRYS) buzz. DryShips is only the beginning though; all these stocks are cheap cheap cheap!

For instance, Knightsbridge’s (VLCCF) P/E is 7.0. Tsakos Energy’s (TNP) is 7.4. Danaos Corporation’s (DAC) is 9.5. Just crazy.

But it’s not like low P/E’s are the only story. Net margins are an average of 18.6%. And, I don’t see marine shipping falling out of favor anytime soon…even if oil subsides (and maybe especially if oil subsides).

To be clear, I don’t see these stocks as ‘trades’. I think they’re foundational investments…though still high powered. At the same time, I don’t know that I’d buy in just right now. I’m waiting for a pullback. I like their relative strength though.

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There are two things that immediately come to mind about our Tenet Healthcare (THC) stock pick (so far). The first is, it’s been profitable. The second thing is, it’s been one wild ride. The ups and downs have been wide enough to make a sailor seasick. Good news though….I think one more good runup like the last couple could get us to our target price of $7.67, and lock down an 89% gain.

Here’s my thinking….see the bullish ‘zone’ framed by a support and resistance line? We’re revisiting the support line right now, after an encounter with the resistance line in late April/early May. If you extend those out and ‘eyeball’ where THC is likely to be the next time that upper ceiling is met, that’s right around that level.

You can also see that’s a key resistance area from early 2007. No since in tempting fate beyond that point.

If the chart does indeed play out like that, it should happen sometime in late July.

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An e-mail we received today reminded me to remind all of you that we invite any and all inquiries. Our focus is small cap stocks, but if there’s a burning question all of our readers can learn from, send ‘em on. You can send us an e-mail, but if it’s just as easy, you’re always welcome to post a response to any blog entry. We’ll move it to an appropriate category, if need be. In the meantime, here’s today’s question about our coverage of small cap company SpongeTech (SPNG)….

Hi,
 
I’m an independent investor and find you blogs on Spongetech very interesting.
 
I had a few questions that I hoped you might be able to answer:
 
1) do you know the current shares outstanding and float?  It appears they’ve gone up about 400% since the end of last year?
 
2) based on their announcements, it looks like they sell their $19.99 kit for about $11.00 to distributors?
 
3) do you know their production capacity?   I understand they have a new warehouse, but was wondering how many units that can fulfill each quarter?
 
Thanks

Thanks for the question. No fanfare here - we’ll just answer them as straightforward as possible, and in order.

1. No, all we have is the same information you have, which is from the last 10Q. We’re showing 196 million shares outstanding. I’m not sure about 400% more from last year, but we do know they’re issuing shares to pay for marketing efforts.. At first I wasn’t a big fan of the practice, but I have to stay they’re making more per share than they’re diluting. So, I don’t have a problem with it. Besides, the market cap is still ridiculously low.
2. That’s about right. We ball-parked $10 per unit. Their actual cost, however, is much less. I don’t know specifics, but I’d guess less than half of that is their cost. That’s why margins are so good, and when the company really starts to crank it up, I’m looking for huge margins. That brings up a point worth making….retail versus wholesale. Their wholesale per-unit profit is probably around $7, while their retail profit (what they sell via their site) I think is closer to $17. The flipside is, they can sell a lot more via wholesale as opposed to retail. Retail is where the big bucks are though. You need both venues though…for the time being anyway.
3. I don’t know their production capacity, though I don’t think they’re capped yet. They outsource the manufacturing, and I get the feeling there’s no ceiling. The new inventory storage facility is adequate too. If you’re wondering why the big backlog versus current sales, that’s not SpongeTech’s doing….their customers (the vendors) don’t want delivery yet. They want those big quantities later. I don’t see capacity being a problem in terms if that $20 million+ backlog.

Hope that helps.

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This is why you get into a stock even when it doesn’t ‘feel’ perfect. Shares of small cap company Bio-Matrix Scientific Group (BMSN) are racing, up 33% today, and hitting new highs of 80 cents. Why? I was hoping it would be a pre-curser to a successful inspection from the California Health Department. I had forgotten they’re paying their preferred stock dividend tomorrow…as long as shareholder’s common shares were properly registered.

To receive the dividend, most owners just decided to push their shares out of margin accounts and into cash accounts. The result was that many - if not most - short positions have been ‘buying to cover’, as shares held in cash accounts can’t be loaned out to short. It’s akin to a margin call. The long-owners are the beneficiaries, and I doubt any short traders are interested in trying their hand again. That’s exactly what we wanted to see.

The upside is also technical; now that BMSN has broken out of a range and is at new monthly highs, other investors are likely to get interested.

The icing on the cake is that we still have the potential news about their licensing inspection. If that goes well, we’ll look for yet another pop in the stock.

The lesson to be learned? Sometimes you just have to get in the batter’s box and take a swing when the story is right. The other lesson to be learned….more often than not your friends at the Small Cap Network steer you in the right direction. BMSN is up 41% from where we picked it, and more inspiring news may be on the way.

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With the holiday weekend now completely over, I suspect we’ll see the gas-pump gouging ease off. In turn, I’m looking for crude oil prices to fall back from their recent record highs. In fact, crude oil is so overbought and ripe for a dip, there may even be a trade-worthy move in the works.

The daily chart tells the story…crude’s been on a rampage. The same chart also tells us not to jump the gun either, as this stall isn’t anything unusual. But man-oh-man are we overbought. Take a look at the daily chart below, then keep reading for thoughts on the weekly chart (where reality really hits home).

On the daily, though the trend has been strong, it doesn’t look ridiculously over-extended.

Now take a look at the weekly chart to see just how far we’ve come. The last three months have been the biggest move (relatively) in years for oil. Stranger things can and will happen, but all bubbles will pop eventually. Is oil’s ready to? Or at the very least, is oil finally at its max price?

If you really want some perspective, now take a look at the monthly chart of crude oil futures. As wild as the last twelve months have been, we actually saw more explosive crude gains in late 1999 and early 2000. Of course, that one tapered off after being overbought for a while…kind of like what we see now.

Just for the record, I’m not one of those folks that expects to see oil at $200. Several factors shape oil prices, the least of which is supply and demand. The dollar, inflation, and hysteria have a lot to do with it, and those things are all tapped out for the time being - at least in my view.

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Per my comments yesterday, I think it would be wise to go ahead and lock in a gain on Silicon Image (SIMG)…for those of you that got into a trade. The support line at $6.80 was breached, and from here there’s more risk than reward. A 26% gain for a couple of months worth of work isn’t bad.

We’ll keep an eye on this one. If it starts to perk up again, I may step in after a healthy pullback. Next time though, I’ll probably go with a call option and get a little more leverage. The option market for Silicon Image isn’t tremendously deep, but I can find enough liquidity somewhere in there.

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We’ve been putting out a lot of trading ideas lately, some specific - like Voyant (which is up 30% from our pick price) - while others were just mentioned in the blog, like Silicon Image was featured on April 3rd. In fact, the Silicon Image (SIMG) pick is the one I want to reprise…..not to encourage you to get in, but possibly suggest some profit-taking.

Just a little back-story about this stock pick….when we blogged it on the 3rd of April, the stock was trading at $5.29. Our attraction was two-fold. We liked the way the buying volume was picking up, and we had seen a major resistance line get broken.

As it turns out, the trade got some traction - SIMG is now trading at $6.93. That’s 31% higher than where we first mentioned it.

So do we keep riding it, or do we bail? We see both sides of the argument, but we’re leaning - conditionally - towards the latter.

Technically the uptrend is still intact. However, the last three days have been sideways, with the stock caught in a $6.80/$6.97 range. This may be pushing our luck, and we don’t want to give anything back if we don’t have to.

On the other hand, there’s no ‘proof’ the bulls still aren’t at work here.

The answer to the ‘what to do’ question lies in that range. If $6.80 fails to act as support, we think a profit-taking exit makes sense. You may want to set a stop somewhere in the $6.70-ish area. If instead SIMG breaks above $6.97, that may be a sign of another bullish leg. At the point, we can’t suggest setting a target, though we would recommend keeping a stop-trigger just under $6.80 (better to have it and not need it than need it and not have it).

Like I mentioned, the trade has already produced more than a 30% gain for us…and we’re still counting.

By the way, if there’s a certain trading idea we’ve mentioned that you’d like us to update, feel free to leave us a note below.

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Another $4.9 million in orders? Yep - small cap company SpongeTech Delivery Systems (SPNG) just announced a big order from three buyers…two in Central/South America, and one on the east coast of the United States. By my count, that brings the 12-18 month sales forecast up towards something around $27 million for SpongeTech. And, if my figures are anywhere close to being right, this latest salvo starts to put SPNG into radically undervalued territory. 

I estimated a backlog of $24 million in late April. We’ll add today’s $5 million order, and subtract a couple of million bucks for orders that were shipped in the meantime. Paring those future deliveries down to just twelve months rather than eighteen, I’d guess we’re looking at about $20 million in sales between now and May of next year.

Here’s the crazy part - the company’s present market cap is $8.2 million. Using a conservative rule-of-thumb price/sales ratio of 2.0, SPNG is undervalued by about 75%. You could try to argue that sales are nothing without earnings, but SpongeTech is also profitable as of last quarter (and pretty decisively profitable).

The stock is getting traction on the news, of course.

Though we’ve seen unfinished breakout attempts before from SPNG shares, this is one I’m not going to let up on. THE COMPANY IS GETTING RESULTS. The stock will eventually reflect them. As I’ve said several times now, getting past 5 cents is the key. Getting above 6 cents could be enormous.

In the bigger picture, it’s worth noting that the customers placing these orders include Winn-Dixie and Wal-Mart Mexico. I also found it interesting that the east coast merchants ordered 900 free-standing displays to prominently present the sponges in their store. That tells me they see an opportunity with the product, and are getting serious about getting them sold.

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Ouch. Wednesday took a bite out of stocks. Or, should I say Bernanke took a bite? His grim expectation of rising unemployment, continued inflation, and the Fed’s unwillingness to do any more than they already have didn’t exactly give the market a warm, fuzzy feeling.

As far as the impact Bernanke’s words had on me, I was neither surprised nor rattled. Did he really tell us anything we didn’t know? The biggest impact it had on us was that it spooked investors. That may be enough, however, for the selling to snowball. What happens next for stocks (the rest of this week) will be critical in determining what’s what.

What I’m still baffled about is his timing and lack of willingness to use a little psychology. He’s six months behind on his call, yet seemed oblivious to the fact that equity markets were finally starting to improve.

The only thing of real substance I can say right now is this….if he was six months behind on his recognition of a troubled economy, he could just as well be behind the eight ball on calling the trough. Like I said, I don’t truly know. It just seems to me this admission could also signal a capitulation of sorts. Maybe that’s just wishful thinking on my part….probably is.

In the meantime, I’ll keep watching index charts. While the Fed is feeding us the facts, stock charts are telling us what investors think of the data…which is the part that matters to you and me.

Of course I’ll also have my eye on the same economic data he’s thinking about….unemployment, inflation, and the dollar. I don’t necessarily see eye-to-eye on his forecasts. However, based on the current trends, he seems to be basically right. The trends for each of these data sets is undeniable when plotted on a chart. So, the truth is below - in living color. (Note how all the data is inter-related.) Just keep in mind every trend will end sooner or later.

That said, this data may or may not affect the stock market. And if it does, the ebb and flow of the economy may or may not be synchronized with stocks. If you think stocks always trade at their true value, that reality might drive you crazy. If you recognize that stocks rarely trade at what they’re actually worth, then the data has more value to you as a timing and psychological tool rather than a true barometer of economic health.

Anyway, the story is only half told; the other half will come in time. I’ll have the next chapter at a later date.

Excellent. I was worried that we’d see this small cap stock surge out of reach right out of the gate, but Voyant (VOYT) opened where it closed on Tuesday…at 12 cents. We are seeing a good deal of buying here, but I’ve yet to see a trade over 14 cents. In other words, this stock looks safe to venture into if you were worried about a lot of news-based volatility.

It looks like it’s going to be a high volume day as well. 244,000 shares have already traded hands, and we’re just nine minutes into the trading day. I expect today to be one of the biggest days ever for the stock in terms of volume, which should get the attention of anybody who may have missed the news (maybe some institutions too).

More importantly, I think this is going to jump-start the stock. I’m glad all of you were able to get in under 14 cents. Let’s just sit back and enjoy the ride.

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Tally another one for this small cap company…Spicy Pickle (SPKL) has opened its 39th restaurant. This one’s close to home, in Fort Collins, Colorado. It’s the second company-owned store in Fort Collins, and if my math is correct, it’s the 6th company owned store. These stores offer more top and bottom line potential than a franchised store would.

This opening also pushes the company closer to operating profitability. When we first started covering their progress I guesstimated they’d start generating a positive cash flow with about 50 stores. That estimate was largely based on franchised units, but a handful of company-owned stores could bring the number of required stores down to the mid-40’s.

On that note, as spring turns into summer and construction is easier to do, I’m looking for the pace of store-openings to increase. We could see 50 stores by this fall.

The stock’s been in a bit of a funk the last several days, and didn’t even budge with today’s announcement. I suspect even though the news is good, investors ‘get it’….the company’s opening lots of restaurants. It doesn’t light a fire anymore. It’ll show up in the next quarterly filing though, which will light a fire.

If you’re in the area, the new restaurant is located at 2120 E. Harmony Rd., Unit 101, Ft. Collins, CO. As we’ve said from day one, we’re excited about this small cap investment based on the great food, which is the reason we’ve seen such rapid expansion. If you get a chance, go try the food and you’ll understand why for yourself. 

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Spongetech Delivery Systems (SPNG) has turned into a marketing juggernaut. What makes this small cap company different than other marketing juggernauts is that they’re spending $1 to make $2….not the other way around. Per today’s news release, now they’re on track to draw revenue from coast to coast (plus Alaska and Hawaii). How so? They’ve got a new television commercial, and it’s playing in all 50 states.

You might recall the company did pretty well with television spots a few weeks ago in select markets. Web traffic and sales both went up to all-time high levels, and the company posted its first decisive profit. In short, the ads (or something) worked. Now they’re taking the same strategy and deploying it on a wider scale. I suspect we’ll see the same proportional result.

If you haven’t seen the ad yet, the word is it’ll be on the company’s website pretty soon.

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Small cap company Stockgroup Information Systems (OTCBB: SWEB) announced today part of their content feed from stockhouse.com will now be available on wireless devices through Viigo.

What’s Viigo? It’s an application that currently runs on Windows Mobile smart-phones and a Blackberry. The software is akin to a web browser, in that it aggregates the content you want to see on your device.

Stockgroup could already send market data to smart phones via their platform if the user had a MarketStream subscription. This latest addition to their technology offerings will open up Stockgroup’s free ‘News and Views’ feed to anyone who has Viigo.

I don’t know what kind of immediate impact this will have for the company. I don’t think it’s an overnight game-changer, but as the world becomes less and less wired (i.e. more and more wireless), I can see this making a decent dent. I just wish there was a way for the company to turn the service into immediate revenue. I’m sure as time passes though, some Viggo users are apt to take the next step and subscribe to the (revenue bearing) wireless service.

That being said, their wireless business was one of the items that didn’t get discussed at great length in last week’s conference call. I kind of wish it had, as the company has been devoting a lot of time and resources to that side of the business. Maybe next time.

If you weren’t able to make the conference call, you can catch a replay of it on the Stockgroup website. You may also want to read through my thoughts on their last quarter, which I posted in the blog.

As promised yesterday, today I’m going to deliver my post-conference-call thoughts on small cap Stockgroup Information Systems (SWEB). The company posted their Q1 earnings yesterday afternoon, but I wanted to reserve judgment until I heard what they had to say.

In short, I think whoever’s buying the stock today is making a mistake. SWEB is up 10% as of the time this us being written, and I congratulate the company for that. I can’t congratulate them for another tepid quarter though, this one with a widened loss.

To set the tone here, it just seems like we keep hearing ‘next quarter’ over and over again. (”Next quarter we’ll increase traffic, next quarter we’ll improve revenue, next quarter will shrink the loss, and next quarter we’ll cut expenses.”) My problem is, we’ve been hearing it for about four quarters now.

I’m not naive enough to think success happens overnight, but these guys have gotten into the habit of not delivering, or being flat wrong about critical elements of their business. 

The one that comes to mind from yesterday is expenses. They reported last quarter that the new website’s R&D was essentially ‘paid for’. In Q1, they pushed expenses up from $2.4 million to $3.6 million.

I don’t know if that was some lingering R&D expenses, or new stuff (the general/admin line shot from $1.0 million to $1.9 million though). It doesn’t entirely matter. I just remember last quarter they were touting all the new site expenses had been paid; they didn’t mention they’d offset those savings with other expenses.

In the conference call yesterday, they said they’d be saving $900K after terminating contracts with two vendors. It wasn’t clear if that was for the next quarter or the entire year, but it won’t matter if they spend the savings on something else…as they did this time around.

My other hot button is an ever-growing staff that’s not getting the results we were told to expect. All those sales and marketing gurus they hired? They were on board for all of Q1. Yet, I didn’t see any significant bump in the top line. All I saw was more payroll expenses.

To salt the wound, Stockgroup just diluted the float again with a $3 million financing. The market cap is only $17 million, meaning $3 million more has a big impact on current shareholders.

For those of you who have faithfully attended the conference calls and followed this company’s progress for nearly a year and half, you’ll probably understand my hesitation to be impressed now…it’s always something. I can’t wait to hear the next excuse. And no, I’m not buying in yet, no matter how much the chart looks like it’s turning around.

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The results are in for Stockgroup Information System’s (SWEB) quarter. The small cap company saw revenue increase by $400K. They pulled in $3.5 million in sales during Q1 of this year versus $3.1 million in sales for the same quarter a year earlier.

The biggest chunk of the improvement came from content licensing revenues. The company sold $2.6 million worth of their content service, up about $500K from licensing and subscription revenues in Q1 of 2007. Ad revenue was not quite flat; they did $875K this time around versus $925 a year ago.

The net loss for the quarter ended up being $1.4 million versus the $550K loss from Q1, 2007. Costs for each category increased proportionally to the prior Q1, except for general and administrative. Several new hires between then and now pushed the general/admin expense line up to $1.9 million from the $1.0 million spent in the first quarter of last year.

All in all, their results were pretty much in line with the market’s expectations.

Now, to get the real scoop, the best thing to do is dial in to the conference call being hosted at 4:05 p.m. EST today. To participate in the conference call, please call 1-866-400-3310 five to ten minutes prior to the start time.

Or, if you’re more of a web-based investor, you can listen to the live webcast. Just go to www.stockgroup.com and look for the webcast link.

As always, we’ve found conference calls offer the much-needed perspective behind the numbers. The Stockgroup calls have traditionally been outstanding sources for ‘the story behind the story’. Whether it is again this time or now depends on the questions asked, which is why we encourage you to dial in and ask about the important stuff.

Most importantly, the call may help define the future for the company. Some of the things we’d like to see get fleshed out in the call…

• What’s the plan for improving ad revenue now that all these sales/marketing people are in place?
• Can we expect to see expenses stay this high going forward?
• What’s the marketing plan to grow the website now that the final version is up and running?
• Above all else, what kind of dollars is the company projecting in the near and long-term (for all lines of the income statement)?

I’ve got some thoughts on the numbers above, but before I pass judgment I want to get on the call and see what else is said. Check back tomorrow for my full opinion. In the meantime, I suggest getting on the call.

Oh, and here’s the official quarterly results from Stockgroup.

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Ever since we started our coverage of small cap stock pick MIV Therapeutics (MIVT), I’ve been following the heart stent industry rather closely…it’s a fascinating arena. Why? Despite the fact that the drug-eluting stent business was practically shut down in 2006 due to health concerns (they could have been making things worse strather than better), there’s still between $4 billion and $6 billion up for grabs in the drug-eluting stent business each year. And, if safety concernes are alleviuted there could be even more money for this market. Yet, there are very few coated stent manufacturers.

MIV Therapeutics is working on a promising one, while Abbott’s (ABT) Xience stent and Boston Scientific’s (BSX) Taxus stent are already on the market. Johnson & Johnson’s (JNJ) drug-eluting Cypher stent is also in use, though it’s a bit of an antique by biotech standards.

Anyway, all the major coated heart stent manufacturers came out with news yesterday about their latest R&D efforts. (They were all in attendance at the EuroPCR conference, where they each presented an update.) Here’s the thumbnail sketch top get you caught up….

Abbott said their next-generation Xience stent - the Xience V - has clinically tested to be safer than the nearest competition…Boston Scientific’s Taxus stent. And by ’safer’, they meant using the Xience stent rather than alternatives led to less thrombosis (arterial scarring) and fewer stent-caused heart attacks.

Boston Scientific didn’t respond to the Abbott claim, instead focusing their attention on their current coated stent called Promus. However, it’s not likely that Boston Scientific is going to publicly disagree with Abbott’s research. After all, PROMUS AND XIENCE V ARE THE SAME STENT!

That’s right - the only difference between Abbott’s new stent and Boston Scientific’s new stent is the name. Abbott has licensed Boston Scientific to sell the device under a different moniker. It/they are currently approved for use in many overseas markets, and may win the FDA’s approval for the United States (which is half the market) within a few weeks.

Side note: If you’re Boston Scientific, standing in Abbott’s stent shadow has got to be a little frustrating, considering Boston Scientific was forced to sell their Promus/Xience technology to Abbott (remember the Guidant spin-off?) a couple of years ago. It’s not a parent/child kind of partnership, but Abbott looks like the hero here….and stands to gain more than Boston Scientific does.

What about Johnson and Johnson’s Cypher stent? J&J didn’t present anything at the conference, nor have they done any meaningful R&D on any new stents. Perhaps they gracefully bowed out of the competition, yielding to the heir-apparent Abbott/Boston Scientific stent. Like we said above, Cypher’s days are probably numbered.

Medtronic (MDT), on the other hand, is still swinging away. They also used the EuroPCR conference as a platform to highlight their Endeavor stent’s long-term success. The first-generation Endeavor is already selling in the U.S. as well as abroad, and so far looks as promising as the Promus and Xience V stents could be.

In other words, a three way competition could be heating up, even if Medtronic is a distant third.

What’s any of this got to do with a small cap company like MIV Therapeutics? Though still several months (and perhaps more than a year) way from winning approval anywhere, MIVT’s stent may actually be superior to any of the stents we mentioned above.

In a nutshell, the coating on MIV’s stents is the same stuff your bones and teeth are made of…which means the odds of thrombosis or related problems are slim. How slim when compared to Promus/Xience V? That’s the question the company is trying to answer.

The first MIV stents were implanted about a year ago, so it’s too soon to say whether or not they’ll be effective or safe. However, I don’t mind saying I think they’ll be at least as safe as Promus.

The FDA requires two years of data - at a minimum - before approving any medical device like a drug-eluting stent. Overseas, the wait wasn’t as long, which is why MIV Therapeutics is focusing on locales other than the United States, at least to start.

And how will a small company like MIV compete against giants like Abbott, Boston Scientific, or Medtronic? Good question. I see two ways. The first way is, their stents have to be almost perfect…much better than the others. Second, they have to be able to get that message across to the doctor’s who see other sales reps all day long.

If they can do those two things, I think they can carve out a very nice piece of the coated heart stent pie. I don’t think they’ll be able to dethrone the big guys, but they have a shot at making a dent. Or, I wouldn’t be a bit surprised to see one of the majors acquire MIV to get ahold of their technology.

In the meantime, I don’t see how Abbott can avoid being the future dominator here. Even if doctors and patients chooses Promus over Xience, Abbott still gets a cut from the licensing agreement.

Regardless, I think all these latest developments in technology are setting up a revival in the drug-eluting stent market. That’s good for all these stocks.

By the way, if you want more background on MIV’s technology, the industry’s past problems, and the industry-wide opportunities, revisit our first look at MIV Therapeutics’ place within the heart stent world.

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We already mentioned this a few days ago, but if you and your 12-or-under kid happen to be heading to Shea Stadium tonight to watch the Mets play the Washington Nationals, you might want to get their before 7:10 p.m.

Why? Tonight is SpongeTech Delivery System’s (SPNG) ‘Promotional Day’. The first 12,000 kids age 12 or under will receive a T-shirt commemorating Shea Stadium.

While any publicity is good, the word is the upside to being a game sponsor has already started. SpongeTech reports their website’s traffic has more than tripled since the radio ads and ancillary mentions - part of the sponsorship package - started a few day ago.

I don’t think that’s why this bulletin board stock pick is perking up again today though, following yesterday’s sleepy session. I think it’s up today because there’s a bigger trend now in place…one where the stock actually reflects its value. (It does happen every now and then ya’ know.)

As before, anything at or above 5 cents would represent higher highs, and possibly a rally effort. If it takes off, a revisit to 12 cents isn’t out of the question. That was our original price target for this small cap stock pick, and we’re sticking to it.

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Though we’ve only got a couple of trading days under our belt since we mentioned bulletin board stock Voyant International (VOYT), they’ve been a good two days. Shares closed at 10 cents on Thursday - the day we issued our company profile in the newsletter. As of right now, they’re at 12.5 cents…up 25% since our first look.

Even more compelling is the volume. We’re seeing a significant amount of buying now.

The short-term line in the sand seems to be 13.5 cents. We saw VOYT peak there yesterday, not to mention peaking at that line a couple other times earlier in the year. If the stock can break past that resistance, I really like the odds of a rally. I’d be accumulating on that breakout.

On the chart below you see a peak around 38 cents. What you don’t see is the peak of 76 cents from the middle of last year. Those are my short-term and longer-term mental goals.

Are they acheivable? I think so, though we’re not going to put VOYT in a full-blown ‘trade’ framework just yet. All I know is this company’s market cap is a mere $14 million, and they’re looking at a handful of multi-million dollar deals.

In the meantime, I think this bulletin board pick is starting to get traction, reflecting the underlying company’s potential.  

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I’m a total of 0% surprised about Sprint-Nextel’s (S) dismal quarterly results. They posted another quarterly loss - a bigger one - for Q1. The reason? Severance charges, and of course, lost customers. They ended the quarter with a million less subscribers than they started with. That slow burn-off of their customer base has been an issue since 2005 when they Sprint bought Nextel.

I’m still baffled why they can’t (or won’t) fix it.

That’s not to say it’s easy to be a mobile service provider. But, Verizon, AT&T, and T-Mobile can do it and at least maintain market share.

What I’m not baffled about is Sprint looking to hook up with Clearwire (CLWR). Clearwire is a mobile broadband company. Their interest in Sprint is using them as a framework on which to build a mobile network using Clearwire’s WiMax technology.

The new company will be called Clearwire, so I’m guessing we’ll see all ‘Sprint-Nextel’ fade away over the next few months. That’s all well and good, especially considering Sprint’s bad karma. My concern is just who’s running the new Clearwire. If it’s Clearwire, great. If it’s Sprint, how can it be any better? The issue was never technology - it was service.

Based on the underlying partners though, I don’t see Clearwire lasting long either…at least not in its present form. Intel, Google, Time-Warner, and Comcast all have money invested in the WiMax partnership. My guess is they’re all test-driving the technology before doing the same on their own….or perhaps before making an acquisition?

Maybe that’s the real value of the new Clearwire - that someone who knows what they’re doing will eventually own the WiMax enterprise. I think it’ll be Comcast, which would be a good move for both parties. Anything to take the service and management aspect out of Sprint’s hand would be a plus; their only asset is that they have some of their customer base left.

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